The shocking trend of rising health care costs monthly is on an unsustainable path for most individuals, families and business owners. Annual and semi-annual increases greater than 10 percent have become commonplace for a vast majority of responsible people trying to protect themselves and family members. Monthly health insurance premiums have become a top five expense cost for families and business owners forcing significant changes to financial planning like savings and hiring new employees. Ways to lower health insurance premiums are present in the market but not widely known.
The following five strategies can reduce your monthly premiums and give you greater value and benefits for your health care spend:
1 - Separate the family from a company-provided plan that covers the employed spouse.
One trend in rising health care costs is the amount an employee is paying to add a family plan to their benefits. The cost of adding a spouse and children makes it worth looking at the difference in premiums to create a separate policy while keeping the employee on company benefits.
2. For business owners with less than 50 employees there are voluntary insurance plans available.
Given the opportunity to build plans that meet unique needs and budget for each employee can reduce the premiums overall and increase the number of employees who can financially participate. Too often choices are limited to one or few plans that might not suit every level of compensation within a company.
3. Multi - year rate locks on premiums are available in the market.
Health insurance premiums have been rising annually for years and are forecasted to continue. There are plans that offer two to three-year rate locks which can be extremely cost effective into year two and certainly year three. The ability to control and budget for a significant business expense is a competitive advantage for any small business and family.
4 Take advantage of the HRA 105 tax deduction as a business owner.
The HRA 105 tax benefit is specifically designed for a business owner to reduce his business tax obligation. By adopting the reimbursement arrangement properly you are also entitled to write off 100 % of allowable medical expenses and your monthly health insurance premiums. A savings of at least 40 percent of your monthly premium spend is realistic after a full years deduction.
5. Fixed Indemnity plans v. deductible plans are affordable.
A pre-determined benefit schedule is a viable option for relatively healthy people who want to reduce out-of-pocket expenses. A first dollar coverage plan reduces out-of-pocket costs as compared to traditional deductible plans where the deductible amount has to be met before insurance benefits are applied. Fixed indemnity plans are typically a lower premium compared to deductible plans.
There are many ways people can influence their access to and cost of affordable health care as well:
- Depending on your age, smoking can increase your monthly premium up to 50 percent.
- Taking prescription medications as directed is very important to underwriters of health insurance.
- Keeping relatively fit through exercise and diet affects potential rate increases due to obesity.
- Having accurate record keeping of medical procedures over the years can eliminate a pre-existing condition concern for an underwriter if it has passed established timelines.
About the Author: Michael Ritsch is a Health Benefits Advocate in Herndon, Virginia. He is a licensed agent in the Commonwealth of Virginia for Health and Life Insurance. Michael specializes in health care benefit plans for individuals, families and small businesses. For more information visit WWW.ushagent.com/michaelritsch